Real estate crowdfunding is a new way of investing in the real estate sector without having to make a large investment of money since the purchase of the premises or housing is done jointly with other investors. These platforms analyze different projects for the sale and reform of buildings, premises or homes in the main cities of France for rent and sale. Then they publish these projects on their web pages and it is the investors who choose the projects where they wish to invest according to their characteristics.
The crowdfunding companies are those that carry out all the procedures and analysis of these investments in exchange for a management fee for the services provided, which is usually a percentage of the profits obtained. Investors will simply choose the projects in which they wish to participate and will receive the return on said investments
The managers of the real estate crowdfunding platforms propose investing in different real estate purchase projects, previously chosen in a selection study according to the purpose of the property, its age, the reforms required, the area and the city in which it is located. Find, among many other factors. In the platform, investors can know the real estate (premises and housing) and if they are interested later, they can invest in said projects, becoming owners of the real estate together with the other investors.
Each project includes all the necessary data for investors to make the decision as the breakdown of the budget to be used for the purchase, reform, payment of taxes, contingencies and, in addition, the expected profitability during the rental and sale once it reaches the expected value. The term of each project will vary according to the evaluations of the experts.
Once the properties have been acquired by the platform with the money of the investors, they are reformed and put into rent to be sold in the just term in which their revaluation is optimal. Investors get the profitability proportional to the investment made from rental income and what corresponds to the surplus value when the property is sold.
To have greater control and limit the risk of non-professional investors, crowdfunding platforms are regulated by the Law of Business Financing that limits the maximum amount to invest according to the type of investor we are: accredited or not accredited.
Non-accredited investors may become accredited if they hire an investment advisory service with a company authorized.
All investments imply a risk; however, we can mitigate this issue depending on the product in which we invest our money. Here are some products for those who are wondering where to invest with less risk:
It is the simplest option, an account with a return applied on capital that allows us to access our money at any time.
We can distinguish on the one hand fixed-term deposits, which offer a return in function of maintaining a quantity of money. You can access the liquidity after the payment of a certain commission. On the other hand we have structured deposits. Products with a fixed term part and another part referenced to a value. They are more complex since they condition profitability to unpredictable factors.
They have a greater risk than fixed-term deposits, since they are not covered. In addition, they have lower liquidity; they cannot be canceled early, only in the secondary market.
Debt of an entity or any company that seeks financing in financial markets. They have a term longer than 3 years. If we need the money ahead of time, you can only sell the bond at the market price in the secondary market, so we can lose money.
In the free guide "How to make safe investments" made by the experts of richesse-et-finance we can know in detail the different investment products that involve less risk for our capital, what types of risks entails investing and the best investment alternatives according to our capital .
